Public relations a challenge for casinos, say top bosses

By Liz Benston

Thursday, Sept. 15, 2005 | 11:07 a.m.

The American Gaming Association, a federal lobbying group that has historically avoided public relations campaigns, said it is working on an education campaign that aims to convince civic leaders in some states that casinos have benefited local communities.

At the Global Gaming Expo, an industry conference that wraps up today in Las Vegas, AGA Chief Executive Frank Fahrenkopf said the membership group decided to take a more active role at the local level after a discussion with members who have complained about high casino taxes in certain states.

Results of a recent survey commissioned by the association also show that 30 percent of opinion leaders in casino states said casinos should pay more than other businesses to help states raise needed revenue. That number rose to 48 percent when a sample of all adults in the state were polled.

"We failed miserably with politicians with regard to the tax question," Fahrenkopf said. "There are tax rates that make it nearly impossible for public companies to operate."

The AGA recently formed a committee, led by Harrah's Entertainment Chief Executive Gary Loveman, that will figure out what kind of campaign the group will pursue.

"Loveman's committee just began," Fahrenkopf said. "I don't know whether we will do national ads. I don't know what the strategy will be."

Fahrenkopf also said the association is waging an uphill battle in the nation's editorial pages, where casinos are vilified in spite of polls that show that most people dont have a problem with gambling. "The media in this country is vehemently anti-gaming," he said.

During a separate panel discussion at Global Gaming Expo, the top executive of MGM Mirage said his company would continue to focus its casino investment in Nevada, Mississippi and New Jersey -- states that "understand gaming" and also have the lowest casino taxes.

MGM Mirage Chief Executive Terry Lanni and Loveman, of Harrah's, said the companies have committed to rebuild their Mississippi casinos damaged by Hurricane Katrina.

"It's a great state to operate in," Lanni said of Mississippi. Other states are "still in question."

Besides the tax data, Fahrenkopf said the results of the association's annual "State of the States" poll were positive for commercial casinos and that the group plans to use the results in its public relations effort.

While the credibility of many other industries has taken a hit in recent years, the casino business over the past several years has maintained a largely positive image.

"The industry is in exceptionally good shape," political pollster Peter D. Hart, who conducted the study for the AGA, said. "It's not like politics," where "things can change overnight."

Hart, who has publicly polled attitudes on gambling since at least the 1980s, said the public used to be much more divided and negative on the subject of casinos.

"Attitudes have changed," Hart said. "People have had a chance to experience gaming in other communities. The sense of uncertainty is not there."

People also are watching shows about Las Vegas on television, he said.

The primary downside for casinos in the study was gambling addiction, which was cited by 19 percent of those polled.

"That is a challenge for the industry," Hart said. "It was then. It is today and it will be tomorrow. On the other hand, more than 80 percent said casinos act responsibly in their communities and are "good corporate citizens."

Casinos have also become palatable to baby boomers, who may not have embraced gambling the way previous generations had, said Michael Pollock, publisher of the Gaming Industry Observer newsletter in New Jersey.

The concern for the industry is that people continue to view casinos as a target for high tax rates -- a view that won't necessarily change as casinos go mainstream, he said. High taxes create "pockets of gaming starved for capital investment" that can't "fully blossom into resort destinations," he said. "Realistic tax rates create more capital investment and jobs."

"The prevailing wisdom is that high tax rates are responsible for gaming helping communities," Pollock said. "That prevailing wisdom is wrong and needs to be changed."